UAE Telecom UAE Telecom Sector is Booming

3 of 2003 and is keen to establish the most sophisticated telecom hub in the Middle East. In order to achieve this objective, it takes advice from the Telecommunications Authority in Canada. Today, the UAE has a mobile penetration of more than 110 percent.

What Europe and other regions experienced in the 1990s, the UAE (around 5 million inhabitants) started just two years ago: the break-up of the state-owned monopoly.

In the Gulf state, this monopoly was Etisalat, which is Arabic and simply means ‘connections’. Then, in 2006, Etisalat’s monopoly was brought to an end, and the first ever competitor – ‘Du’ – entered the market.

The full name of Du is: Emirates Integrated Telecommunications Company.

It was in the summer of 2007 that Du’s CEO, Osman Sultan, launched a massive marketing campaign with exhibition stands in major shopping malls around the UAE, with raffles and gifts for youngsters.

At first, some people complained about having weak signal, but this is always the case with new operators entering the market.

Meanwhile, Du covers 99 percent of the UAE’s mobile and fixed-line market. An added advantage of Du is, while Etisalat customers have to pay for every full minute (whether their call lasts one second or 59 seconds), Du users are charged for the exact time measured in seconds. “This shows you that, even with the excessive 100 percent penetration rate when Du started, the market is still healthy, it has grown by a big chunk and Du has obtained around 23 percent market share in three years, and they said they would obtain 30%”, says Mohammed Al Ghanim, Director General of TRA.

When asked what challenges were faced when launching Du, CEO Osman Sultan explains: “Launching in a market like the UAE had three very important, unique characteristics.

The first one is that, it is unprecedented in the world that, at the time when the second player entered the market, the level of penetration of telecom services was so high, not to mention the level of saturation”. Mr. Sultan was confronted with the lack of coverage in the first months of Du.

However, since then, the critics have gone silent. “So, that is one thing that created very high expectations of the market and the necessity for Du to really differentiate itself. Secondly, I cannot think of another example where a startup operation was licensed to offer fully fledged telecommunication services, not only mobile services but also fixed, broadband, TV and international traffic; all this at the same time.” Last but not least, Mr. Sultan is also committed to another important party in his portfolio: “The third one is not related to the UAE market but is related to our company: the founding shareholders of this company decided that they would not partner with an existing operator, be it international or regional.”

In less than two years, Du has been able to obtain 23.6% of the market share and has reached the two million subscribers mark. For Osman Sultan, the time has come to look abroad: “The mandate of Du today is focused on the UAE market.

It’s worth highlighting that two of our major shareholders – the Mubadala group and Tcom, representing respectively the Abu Dhabi government and Dubai Holding – already have some operations on the international arena in telecom.”